Government Help for MSME Development

Universally, the Micro Small and Medium Enterprises (MSMEs) are considered as important growth drivers for the economy and industrial development of the country. The key benefit of this sector is in its employment potential at extremely affordable cost. MSMEs account for more than 80% of overall enterprises in worldwide economies and contribute major part of industrial production as well as export in several countries.


In India, MSMEs play an important role in industrial development of the country. Labour intensity of MSME sector in India is considerably higher than other big sectors. In recent times, the Indian MSME sector has registered significant growth as compared to other industrial sectors. With its dynamism and agility, the sector has demonstrated commendable adaptability and innovativeness to cope up with the recent economic slowdown.


According to the recent statistics, Indian MSME sector employs more than 55 million people in over 25 million enterprises. It is projected that, the sector accounts for more than 40% of the overall manufacturing output and about 35% of the entire export of the country.


Assistance from Government of India for MSME Development

  • Enterprise & Skill Development – The office of MSME organizes several entrepreneurship development and vocational programmes coupled with some specific skills related to industries like food processing, electrical and electronics which help foreign investors to start their own business in India. Here is a list of some of these important programmes –
    • Entrepreneurship Development Programmes(EDPs)
    • Entrepreneurial Skill Development Programme (ESDP)
    • Management Development Programmes (MDPs)
    • Industrial Motivation Campaigns (IMCs)
    • Vocational and Educational Training
  • Technology Upgradation – For the proper up-gradation of technology the Indian government offers capital subsidy and some other assistance to support MSMEs. All the important schemes covered under technology up-gradation and productivity enhancement help MSMEs to tackle the tough challenges of globalization and liberalization. Go through the following details to know about the name and objective of these schemes –
    • Credit Link Capital Subsidy Scheme (CLCSS) – The objective of this scheme is to obtain capital subsidy for implementing new technology.
    • National Manufacturing Competitiveness Programme (NMCP) – The key objective of this scheme is to strengthen MSEs via competitiveness.
    • ISO 9000 Reimbursement Scheme – The prime goal of this scheme is to enhance the competitive strength of the small and medium scale sectors.
  • Access to Credit –The Development Commissioner of MSME offers all essential credit support to Medium and small enterprises through several schemes. These schemes are mainly operated under financial institutions such as NSIC and SIDBI. Go through the following details to know more about the name and objectives of these schemes –
    • Credit Guarantee Trust Fund for MSEs (CGT – MSE) – The objective of this scheme is to facilitate collateral free credit facility for MSMEs.
    • Micro Finance Programme – The key goal of this scheme is to offer credit to low income enterprises.
    • Trade Related Entrepreneurship Assistance and Development (TREAD) –It provides all the necessary assistance and guidance to women entrepreneurs to establish MSMEs.
  • MSE- Cluster Development –TheGovernment of India and the Ministry of MSME have adopted a cluster development approach as a prime strategy to improve the competitiveness and productivity of MSMEs in the country. Clustering of units helps credit agencies and banks to offer affordable services to Micro and Small Enterprises. The key objective of this scheme is to improve capacity of MSMEs via formation of consortia, self-help groups and up-gradation of associations.

Marketing Assistance –The Indian government executes various schemes which are designed to offer a competitive edge to the MSME sector at global level. Here is a list of marketing assistance schemes –

    • SSI – MDA
    • Vendor Development Programme for Ancilarisation


The objective of these marketing assistance schemes below –

    • To spread the importance of adopting bar coding system at a large scale.
    • To improve export from micro, small and medium enterprises.
    • To promote Micro, Medium and Small exporter to tap the overseas market.
    • To improve participation of representatives of micro and small manufacturing enterprises under a stall of MSME India at International Trade Exhibitions and Fairs.
  • Legal Framework –In recent times, the MSME sector has emerged as a significant contributor to the Indian economy. Therefore, it has become extremely important to address detail concerns of these enterprises and give them recognition at a global level. The natural mobility of these enterprises has to be facilitated with proper legal framework and necessary policy interventions. Considering these important objectives, the Indian government has come up with an exclusive legal framework for MSEMs under Micro, Small and Medium Enterprises Development Act, 2006. It is one of the important initiatives taken by the Indian government to utilize the potential of SMEs. Several policy initiatives are also executed at state level for strengthening the role of MSMEs at domestic as well as global level.


Some of the important schemes executed by the Ministry of Micro, Small and Medium Enterprises (MSME) are as follow –

  • Performance and Credit Rating Scheme
  • ISEC – Interest Subsidy Eligibility Certification
  • PRODIP – Product Development, Design Intervention and Packaging
  • RGUMY – Rajiv Gandhi UdyamiMitraYojana
  • PMEGP –Prime Minister’s Employment Generation Programme (PMEGP)
  • SFURTI –Scheme of Fund for Regeneration of Traditional Industries (SFURTI)


There are some specially tailored schemes which National Small Industries Corporation has initiated to put MSMEs in an advantageous and competitive position. These schemes mainly include SME Credit Rating, Export Credit Insurance, Bank Credit Facilitation, Bill discounting, technology support and Government Stores Purchase Programme. Apart from these standard schemes, the Indian government has also initiated International Cooperation Schemes for upgradation and technology infusion of Indian MSMEs. The key objective of these schemes is promotion and modernization of export business of these enterprises. Though there are no special reservations offered to women, there are some incentives and concessions provided by Indian government to women entrepreneurs in MSME sector.



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